Following futures positions of non-commercials are as of July 18, 2023. 10-year note: Currently net short 629.6k, down 5.6k. The FOMC meets next week. Ahead of this, the fed funds rate was left unchanged in the June meeting, pausing for … Continued
The Russell 2000 continues to attract offers at 1900. Amidst this, a golden cross is near completion. Plus, a ratio between the Nasdaq 100 and the Russell 2000 is potentially nearing reversal, raising the odds that the latter begins to … Continued
NIPA profits are now down three quarters in a row. The downward momentum likely continues in an environment in which the fed funds rate has gone up by 500 basis points over 14 months. This will force the sell-side to … Continued
Small-cap bulls once again were forced to defend the lower bound of the 1700-1900 range in place since January last year. The Russell 2000 just does not respond to the optimistic growth forecasts in earnings for this year and particularly … Continued
It is an FOMC week this week. Fed funds futures expect the one-year tightening cycle to terminate with a 25-basis-point hike this time; by June, the Fed is already expected to ease, with 2023 ending at 3.68 percent and 2024 … Continued
Within a year, US interest rates have gone up a lot, with the fed funds rate having risen from zero-bound to north of 4.5 percent currently. In the futures market, traders expect the benchmark rates to peak between 550 basis … Continued
US consumer spending is holding up, even as manufacturing is under tremendous pressure. Consumers have been dipping into savings owed to loads of government stimulus post-Covid. Bank deposits remain healthy but at the same time the rate of change year-over-year … Continued
Last Friday’s PCE report forced markets to reprice risk assets. Stocks dropped but at the same time closed significantly higher off sessions lows. Near-term, equities can rally – if nothing else just to unwind the daily oversold conditions. As the … Continued
The fed funds rate has gone up more than 450 basis points since last March, and more tightening is on the way. This is yet to sufficiently make a serious dent in consumer inflation, even as economic data particularly surrounding … Continued
Most traders on Wall Street grew up in a low-interest-rate, low-inflation environment. It is hard for them to relate to why Volcker acted the way he did in the late-‘70s/early-‘80s. Greenspan, Bernanke and Yellen operated at a time when inflation … Continued